The cost of filling up the car is rising in the wake of soaring crude and by this weekend, pump prices will race past the highs for all of 2009, AP reported.
Tracing the ascension of crude, up 14 percent since mid-December, energy prices across the board are catching up. On Tuesday, benchmark crude prices closed higher than they had on any day last year.
It's part economic and part meteorologic.
Vicious pockets of cold stretched from the Northeast to the South, where farmers in the Florida panhandle tried to save tomato and strawberry crops. Four deaths in Tennessee were blamed on low temperatures.
The frigid blast has squeezed heating oil supplies in some areas during a year when demand had been very weak and refineries have been operating at low levels.
Huge surpluses have been falling in recent weeks, contributing to prices already driven higher by the falling dollar. When the dollar falls, investors holding stronger currency can essentially buy more dollar-based crude and they have, doubling oil prices last year.
Look at what happened this week:
- Crude prices closed up 26 cents at $$81.77 a barrel Tuesday, the highest settlement price on the New York Mercantile Exchange since Oct. 9, 2008.
- Heating oil futures settled up less than a cent at $2.1941, well beyond the highest prices of 2009.
- Gasoline futures closed more than 2 cents higher at $2.125, the highest since Oct. 3, 2008.
By the weekend the average gallon of gas in the U.S. will hit $2.70, eclipsing the peak for 2009, and will push $3 by spring, predicted OPIS' Tom Kloza.
One of the breaks consumers got in 2009 was cheap energy. It's too soon to tell if the rising prices right are setting the trend for 2010, though Peter Beutel of Cameron Hanover called sharply higher heating oil prices an "ominous sign for the year ahead."
Pump prices rose less than a penny overnight to $2.667 a gallon Tuesday, according to auto club AAA, Wright Express and Oil Price Information Services.
"Some back of the envelope arithmetic puts the current U.S. fuel bill at about $1.066 billion each day," Kloza wrote. "A year ago, that daily outlay was about $625 million."
Already, gas costs $1 more a gallon than a year ago, and that's costing a typical motorist about $50 more a month.
Also on Nymex, after a meteorologists predicted a thawing out around the Chicago area by the end of the month, natural gas futures fell 24.7 cents to settle at $5.639. Natural gas is used more prominently in the Midwest to heat homes than in the East.
In London, Brent crude for February delivery rose 47 cents to settle at $80.59 a barrel on the ICE Futures exchange.